You can deduct certain moving costs on the federal income tax returns every year.
Do you qualify for Tax Exemption?
You may, under certain circumstances, deduct some moving expenses on your federal income tax return if you complete the appropriate forms.
Job Related Moving – Transfer to a new location under existing employment or transfer for a new job.
Conditions for Moving Expense Tax Exemption
Change in Job – Minimum 50 miles away to new location. (50 miles is calculated on the shortest common travel route)
Time Line – You move with a year of the date you commence work at new office.
Employment Duration – Minimum 39 weeks of full time work for 12 months from the move date. In case you are unable to complete your 39 weeks due to reasons such as lay off, transfer or medical reasons, you can still claim the moving expenses for that year.
Self Employed – Minimum 78 weeks of full time work for 24 months from the move date.
For detailed information on full time work regulations please visit IRS. For armed personnel (retired & serving) and survivors of deceased living outside USA, separate regulations may apply and the same can be found at IRS website.
What are Tax Deductible Expenses?
Packing, Transportation of furniture including pets, automobile, in transit storage( restricted to the cost of 30 consecutive days of storage from pick up date) and valuation cost.
Personal one way travel and lodging cost on the most shortest direct route for the selected mode of transport.
What are Non-Deductible Tax Expenses?
- Food expenses during relocation
- House hunting travel costs before move
- Temporary stay before moving into your permanent new home
- Costs of leasing, selling and renting homes
- Security deposit lost to clean the property
- Deposits needed when signing a new lease agreement
- Home improvements costs
- Drivers and automobiles licenses
- Any Club membership dues that may be lost because of relocation
- Loss incurred due to the selling of your home
- Penalties on Mortgage
- Real-estate taxes
Disclaimer: The above instructions are basic guidelines and are subject to change as per IRS regulations. We recommend that you visit the IRS website for detailed instructions on reporting moving expenses. You should also consider asking your accountant about the tax implications on move-related deductions.